CASH TRANSFERS, FOOD PRICES, AND NUTRITION IMPACTS ON INELIGIBLE CHILDREN

Abstract

Can cash aid harm nonrecipients by raising local prices? We show that a household-targeted cash transfer in the Philippines increases the prices of perishable foods in some markets and raises stunting among nonbeneficiary children by 11 percentage points (34%). Impacts increase in the size of the village income shock and remoteness—and are sustained two and a half years after program introduction. Price effects from an experimental sample are confirmed with national expenditure surveys collected during program scale-up. Household-targeted cash transfers can thus gen-erate local spillovers that undermine program goals. Selected geographic targeting may avoid price spillovers at moderate additional cost.